Dax Index News: Today’s Forecast Hinges on US Jobs Data, Trade Talks, ECB Tone

DAX Hits Record Highs as ECB Cuts Rates

The DAX advanced 0.19% on Thursday, June 5, building on Wednesday’s 0.77% gain to close at 24,277. Notably, the Index rallied to a record high of 24,479 before easing below 24,300.

The ECB cut interest rates by 25 basis points on June 5, aligned with expectations, driving the DAX to fresh highs. However, a hawkish ECB President Lagarde triggered a reversal, leaving the Index with modest gains. President Lagarde offered no signals of further rate cuts, suggesting a potential pause in July.

Oliver Rakau, Chief German Economist and ECB commentator at Oxford Economics, commented:

“A bit technical. But ECB forecasts (incl. stable core close to 2% that Mdm Lagarde was so proud of) are based on market rate expectations. I believe these priced in rate cuts below 2% at cut off. Think she overreached with her communication a bit to quash July rate cut expec.”

Bank Stocks Rally on Hawkish ECB Messaging

President Lagarde’s stance boosted demand for bank stocks. Commerzbank and Deutsche Bank posted gains of 3.48% and 2.02%, respectively. A higher-for-longer rate path could widen net interest margins, supporting bank earnings.

Bayer soared 4.38% after the US FDA approved broader use for its prostate cancer drug, Nubeqa. Goldman Sachs upgraded the stock recommendation from Neutral to Buy, contributing to the session gains.

German Industrial Production and Trade Data Ahead

On Friday, June 6, the German economy will be in the spotlight. Economists forecast German exports to fall 0.5% month-on-month in April, following a 1.1% increase in March, while expecting imports to slip 0.3% (March: -1.4%).

Weaker trade figures may signal slowing US demand under tariff pressure, impacting trade-related stocks. Alternatively, resilient exports may ease concerns about tariffs and lift sentiment.

Economists expect industrial production to drop 1% month-on-month in April after a 3% rise in March. A slump in output would contrast with recent survey-based data. Germany’s HCOB Manufacturing PMI survey showed sector output rose for a third consecutive month in May.

Weak trade and production numbers could revive hopes for multiple ECB rate cuts to bolster the Euro area economy. However, upbeat figures may reinforce bets on a July pause, impacting demand for DAX-listed stocks.

German factory orders unexpectedly rose 0.6% month-on-month in April, driven by robust domestic and Euro area demand.

Wall Street Drops as Trump-Musk Feud Weighs on Sentiment

US markets posted losses on June 5 as the President Trump-Elon Musk feud intensified, rattling markets. The Nasdaq Composite Index fell 0.83%, while the Dow and the S&P 500 declined 0.25% and 0.53%, respectively. Notably, Tesla (TSLA) shares plunged 14.26%.

Trade concerns added to the cautious mood. Trump reported a lengthy call with China’s President Xi Jinping, with US representatives set to meet China’s trade negotiators soon. However, doubts about tariff removal limited the market enthusiasm.

Meanwhile, US jobless claims rose to 247k, up from 239k, reinforcing labor market concerns after weak ADP data.

US Jobs Report in Focus

Friday’s US Jobs Report will be pivotal. Economists expect a slower pace of nonfarm payroll growth, stable unemployment at 4.2%, and softer wage inflation in May.

Slower wage growth, rising unemployment, and a modest increase in nonfarm payrolls could raise recession risks, weighing on risk assets like the DAX. Conversely, better-than-expected labor market data may support equity gains.

Traders should also track US-EU trade developments and the Fed’s reaction to the Jobs Report.

Outlook: Key Catalysts for the DAX

The DAX’s near-term outlook hinges on the US Jobs Report, US-EU trade headlines, and central bank signals.

• Bullish Case: Positive updates from US-EU trade talks, an upbeat US Jobs Report, and dovish central bank cues could send the DAX above 24,500.
• Bearish Case: Trade gridlock, a weaker US Jobs Report, or hawkish central bank signals may push the DAX toward 24,000.

As of Friday morning, the DAX futures were down by 66 points, while the Nasdaq 100 mini gained 27 points, signaling a choppy end to the week.

Technical Setup Suggests Cautious Optimism

The DAX trades above the 50-day and the 200-day Exponential Moving Averages (EMA), indicating underlying bullish momentum.

• Upside Target: A break above the June 5 record high of 24,479 could open the door to 24,750, bringing 25,000 into view.
• Downside risk: A break below 24,000 exposes support at 23,750, followed by the May 23 low of 23,275.

The 14-day Relative Strength Index (RSI), at 65.93, indicates the DAX has room to retest recent highs without entering overbought territory (RSI > 70).

Conclusion: Eyes on Data and Trade Headlines

Traders should closely watch US-EU trade updates, macroeconomic data, and central bank cues for guidance.

Explore our exclusive forecasts to see whether trade optimism can send the DAX to new highs.

Refer to our latest forecasts and macro insights here for further analysis, and consult our economic calendar.